People tend to want their novels to be real – about real life and believable characters, or written in such a way as to make us think that even the most fantastic worlds are possible. But Benjamin Markovits challenges all that in his fiction. At heart, his books are about how it feels to read something that is made up of imagination and lies, that could be half true, some of it, but who's to know for sure? And it is this quality – the very exposure of its fictionality – that makes his work so interesting and mystifyingly real.

That's not to say his books contain none of the traditional pleasures of the novel. His latest, Childish Loves, like all his work, is scrupulous in its attention to human detail and the infinitesimal gradations of emotion. Moreover, as the third volume in his Byron trilogy – stories about stories that are about the Romantic poet – this novel has been thoroughly prepared for in the way of historical and factual writing to provide a reliably familiar foundation upon which to construct a work of fancy.

Yet there's so much more going on here than simply keeping faith with certain novelistic conventions. In Childish Loves, the author uses a first person "I" with all the naked honesty of a memoir to tell the story of how he came across the history of Lord Byron's sexual coming of age. That story is gorgeously told, with all the poet's proclivities and strange physiognomy and rich seams of thought and feeling brought to life. The story is the product, however, not of the pen of the writer Benjamin Markovits but, we are told, of the imagination and repressed desires of a middle-aged schoolmaster, whom Markovits tells us he once knew.

To those familiar with the preceding books in the trilogy, Imposture and A Quiet Adjustment, this device will be familiar. The schoolmaster is Peter Pattieson, who was introduced to us in Imposture as the author of a novel about Byron and his doctor – and in the prologue and opening lines of that novel Markovits first dallied before us his game of truth or dare: "Some years ago I taught at a private school in New York," he wrote. "One of my colleagues there was an English teacher called Peter Pattieson; I had the dim sense, as I met him, of having heard the name somewhere before." That's because the man behind the name has a different name, Sullivan – "Pattieson" has been lifted from a Waverley novel. In the second volume of the trilogy, the author's own "character", that of someone who knew this Peter Pattieson, becomes invisible too. A Quiet Adjustment is the story of Byron's relations with his wife and sisters, and seems to be a work of standard historical fiction – albeit one that is devastating in its account of the cruelties of a certain kind of marriage.

Although we don't need to have read either of its predecessors to enjoy Childish Loves, they do set us up for the third instalment, in the sense that they outline Markovits's literary project – his declared interests in the unreliability of storytelling. And it's only in this last novel, too, that we have the clear exposure of Markovits's ambition, in the way he merges the histories of Peter Pattieson and Lord Byron with that of his own fictional self and shows all three narratives to be equally compelling. Whether we're reading about Byron losing his virginity, or the shy observations of a quiet teacher who loves to look at boys, or the story of "Ben Markovits", alone in America with his new wife and Pattieson's papers and life all around him, each tale is revealed to be a device created to test the limits of our belief in a story. "One of the things we agreed on," Markovits writes at the end of Childish Loves, as the character of himself whom he's created concludes his story, "is that I would make no attempt to publish this book."

All this makes for enthralling reading – despite the fact that Markovits's work is quiet in the extreme. His second work of fiction, the ravishing and disturbingly placid Either Side of Winter, also sets out a beautifully finished surface of self-consciously crafted stories that seem to fit, so neatly, one into the other – only to leave us with an exhilarating sense that nothing actually fitted after all. Next to this, it comes as no surprise to see that his debut novel, The Syme Papers, set itself up proudly from the outset as a piece of historical literary fakery, and that there is also a fictionalised memoir, Playing Days, among his published works.

For the whole game is fabulously real, as are the emotions and reactions that each narrative generates. I began this review using the word "heart" to describe the centre of Markovits's writing. For it may be thought that all this playing with artifice could never give us what certain critics keep telling us we go to novels for: to see ourselves writ large, to get closer to the workings of the human mind, have characters we can believe in, and so on. All amounting to what Jonathan Franzen, in a recent article in the New Yorker, described so dully as that old "suspension of disbelief".

But when so much fiction has us no more than nodding our heads in agreement as we see the author – once again – construct a familiar world where we feel clever and safe, how much more real is the moment when we don't suspend our disbelief, when we engage with a novel as we might a good poem, so that we become part of its project in the very reading of it. To leave us disarmed and bewildered and moved and changed: that is what prose can also do.